Thailand is Southeast Asia’s second largest economy after Indonesia. Its 2018 GDP per capita was Int$19,000, placing it in the middle of the pack of Southeast Asian countries. Notably, it is considered one of the most economically unequal countries in the world, with 1% of the 69 million people owning 67% of the wealth.
A large portion of the Thai population lives in rural areas, although the wealth is concentrated within a couple of urban metropolises like Bangkok. The economy was agriculturally focused through the mid 20th century, followed by a period of time focused on light industry, textiles, and food processing. Today, Thailand is heavily industrialized. Apart from being a well known tourist destination, Thailand and its economy depends on the automotive, financial services, and electric appliances industries. It is a major exporter across all of these industries, and as a result its economic outlook is tied to that of its main trade partners (U.S., China, Japan). To decrease this reliance, the Thai government has begun to take steps to invest in innovation and its high-tech industry.
There is a noticeable urgency to get these efforts up and running, and more generally to transform the economy given Thailand’s rapidly aging population and declining workforce. According to the World Bank, as of 2016, 11% of the Thai population (about 7.5 million people) are older than 65, and by 2040, a projected 17 million Thais will be 65 or older – more than 25% of the population. The primary driver of this aging has been a steep decline in fertility rates.
Moreover, the working age population is expected to shrink by around 11% as a share of the total population between 2016 and 2040, a drastic decline when compared to other East Asian countries. This working population crisis threatens Thailand’s future economic prospects; the country is projected to fall from the 20th to 25th ranked global economy over the course of the next 30 years. The clock is ticking on Thailand’s efforts to pivot to new leading industries and to train and develop a new generation of workers.